King's University College MOS 1033A/B

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CHAPTER EIGHT OVERVIEW

SECTION 8.1 – Enterprise Systems and Supply Chain

Management
• Building a Connected Corporation Through Integrations
Chapter 8 • Supply Chain Management

ENTERPRISE • Technologies Reinventing the Supply Chain

APPLICATIONS
SECTION 8.2 – Customer Relationship Management and
BUSINESS
COMMUNICATIONS Enterprise Resource Planning
BUSINESS DRIVEN • Customer Relationship Management
Information Systems
Seventh Edition • The Benefits of CRM
Paige Baltzan
• Enterprise Resource Planning
• Organizational Integration with ERP
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SECTION 8.1: SUPPLY CHAIN MANAGEMENT LEARNING OUTCOMES 1

1. Explain integrations and the role they play in connecting a

corporation
2. Describe supply chain management along with its impact
on business
3. Identify the three technologies that are reinventing the
supply chain

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Professor J. Siambanopoulos 1
King's University College MOS 1033A/B

BUILDING A CONNECTED CORPORATION THROUGH BUILDING A CONNECTED CORPORATION THROUGH

INTEGRATIONS 1 INTEGRATIONS 2

Integration – Allows separate systems to communicate Integration Example

directly with each other, eliminating the need for manual
entry into multiple systems
• Application integration
• Data integration
• Forward integration
• Backward integration

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BUILDING A CONNECTED CORPORATION THROUGH

INTEGRATION TOOLS 1
INTEGRATIONS 3

A Central Information Repository Example
Enterprise system – Provide enterprise-wide support and
data access for a firm’s operations and business processes
Enterprise application integration (EAI) – Connects the
plans, methods, and tools aimed at integrating separate
enterprise systems

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Professor J. Siambanopoulos 2
King's University College MOS 1033A/B

INTEGRATION TOOLS 2 SUPPLY CHAIN MANAGEMENT 1

Five basic supply chain activities

Three Primary Enterprise Systems

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SUPPLY CHAIN MANAGEMENT 2 SUPPLY CHAIN MANAGEMENT 3

Supply Chain Management (SCM) – The management of
information flows between and among activities in a supply chain
to maximize total supply chain effectiveness and profitability
The supply chain has three main links
1. Materials flow from suppliers and their “upstream”
suppliers at all levels
2. Transformation of materials into semifinished and finished
products through the organization’s own production
process
3. Distribution of products to customers and their
“downstream” customers at all levels

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King's University College MOS 1033A/B

SUPPLY CHAIN MANAGEMENT 4 SUPPLY CHAIN MANAGEMENT 5

Supply Chain Example Walmart and Procter & Gamble SCM Example

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SUPPLY CHAIN MANAGEMENT 6 SUPPLY CHAIN MANAGEMENT 7

Effective and efficient SCM systems can enable an Effective and Efficient SCM Systems Effect on Porter’s
organization to Five Forces
• Decrease the power of its buyers
• Increase its own supplier power
• Increase switching costs to reduce the threat of substitute
products or services
• Create entry barriers thereby reducing the threat of new
entrants
• Increase efficiencies while seeking a competitive
advantage through cost leadership

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Professor J. Siambanopoulos 4
King's University College MOS 1033A/B

SUPPLY CHAIN MANAGEMENT 8 BLOCKCHAIN: REVAMPING THE SUPPLY CHAIN 1

Three supply chain optimization models Supply chain visibility – The ability to view all areas up and
down the supply chain in real time
• Supply chain optimization: Supply chain optimization makes
the best use of technology and resources like to improve “Where is my package?”
efficiency and performance in a supply network.
• Inventory optimization: Inventory optimization is the process
of maintaining the right amount of inventory required to meet
demand, keep costs low, and avoid common inventory issues
such as stockouts, overstocking, and backorders.
• Transportation and logistics optimization: Planning and using
resources. Planning truck routes, schedules of deliveries,
using GPS for locating trucks, etc.

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BLOCKCHAIN: REVAMPING THE SUPPLY CHAIN 2 TECHNOLOGIES REINVENTING THE SUPPLY CHAIN 1

• Fraud and Counterfeits The three components of supply chain management

• Immutability and Interoperability (can’t be changed and

can work with different systems)
• Provenance (the record of ownership)
• Recalls (calling back products due to a flaw)
• Scalability and Security (can increase in size)
• Smart Contracts
• Traceability

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King's University College MOS 1033A/B

SECTION 8.2: CUSTOMER RELATIONSHIP MANAGEMENT

TECHNOLOGIES REINVENTING THE SUPPLY CHAIN 2
AND ENTERPRISE RESOURCE PLANNING

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LEARNING OUTCOMES 2 CUSTOMER RELATIONSHIP MANAGEMENT 1

4. Explain operational and analytical customer relationship
management
5. Identify the core and extended areas of enterprise
resource management
6. Discuss the current technologies organizations are
integrating in enterprise resource planning systems
Customer relationship management (CRM) – Involves
managing all aspects of a customer’s relationship with an
organization to increase customer loyalty and retention and
an organization's profitability
Many organizations, such as Charles Schwab and Kaiser
Permanente, have obtained great success through the
implementation of CRM systems
Watch the video: 1 What is CRM

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King's University College MOS 1033A/B

CUSTOMER RELATIONSHIP MANAGEMENT 2 CUSTOMER RELATIONSHIP MANAGEMENT 3

CRM Key Players Text message, Instant message

Voice mail, Voice call
Lead: A person or company Email
Contact: Specific individual
that is unknown to your
representing the account.
business. Web order, Phone order
Meeting
Customer service call
Sales Opportunity: An
Account: A business
opportunity exists for a Twitter/Facebook
relationship exists and can
potential sale of goods or
include customers, prospects,
services related to an account
partners, and competitors.
or contact.

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CUSTOMER RELATIONSHIP MANAGEMENT 4 CUSTOMER RELATIONSHIP MANAGEMENT 5

Organizations can find their most valuable customers
through “RFM” - Recency, Frequency, and Monetary value
• How recently a customer purchased items
• How frequently a customer purchased items
• The monetary value of each customer purchase
CRM reporting technology – Help organizations identify
their customers across other applications
CRM analysis technologies – Help organization segment
their customers into categories such as best and worst
customers
CRM predicting technologies – Help organizations make
predictions regarding customer behavior such as which
customers are at risk of leaving

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King's University College
CUSTOMER RELATIONSHIP MANAGEMENT 6
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MEASURING CRM SUCCESS
Sales Metrics
Number of prospective customers Cases closed same day
Number of new customers
Number of retained customers
Number of open leads
Number of sales calls
Number of sales calls per lead
Amount of new revenue
Amount of recurring revenue
Number of proposals given
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Professor J. Siambanopoulos
Customer Service Metrics
Number of cases handled
by agent
Number of service calls
Average number of service
requests by type
Average time to resolution
Average number of service
calls per day
Percentage compliance with
service-level agreement
Percentage of service
renewals
Customer satisfaction level
MOS 1033A/B
THE POWER OF THE CUSTOMER
The customer is always
right and now has more
power than ever thanks
to the Internet
(NOTE: The customer
is NOT always right but
that’s for another class)
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OPERATIONAL AND ANALYTICAL CRM 1
Marketing Metrics
Number of marketing Operational CRM – Supports traditional transactional
campaigns
processing for day-to-day front-office operations or systems
New customer retention rates
that deal directly with the customers
Number of responses by
marketing campaign Analytical CRM – Supports back-office operations and
Number of purchases by strategic analysis and includes all systems that do not deal
marketing campaign
directly with the customers
Revenue generated by
marketing campaign
Cost per interaction by
marketing campaign
Watch the video: 2 What is Salesforce
Number of new customers
acquired by marketing
campaign
Customer retention rate
Number of new leads by
product
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King's University College MOS 1033A/B

OPERATIONAL AND ANALYTICAL CRM 2 OPERATIONAL AND ANALYTICAL CRM 3

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MARKETING AND OPERATIONAL CRM SALES AND OPERATIONAL CRM 1

Three marketing operational CRM technologies The sales department was the first to begin developing CRM
systems with sales force automation a system that
1. List generator automatically tracks all of the steps in the sales process
2. Campaign management system: Allows you to vital data
and to identify the key outcomes in various marketing
efforts. E.g. separates social media spending/plans with
other traditional methods (radio, print, TV)
3. Cross-selling and up-selling: Selling related products from
your firm and getting customers to buy more expensive
versions (or extra features) of products. E.g. A bank
selling you a mortgage AND insurance. Getting a
customer to buy the “deluxe” version vs. the “basic” one.

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King's University College MOS 1033A/B

SALES AND OPERATIONAL CRM 2 CUSTOMER SERVICE AND OPERATIONAL CRM

Sales and operational CRM technologies Three customer service operational CRM technologies
1. Contact center (call center)
1. Sales management CRM system
2. Web-based self-service system
2. Contact management CRM system 3. Call scripting system
3. Opportunity management CRM system
Common features included in contact centers
• Automatic call distribution
• Interactive voice response
• Predictive dialing: An outbound calling system that automatically
dials from a list of numbers and screens out busy signals,
voicemails, no-answers, disconnected numbers, etc. and
automatically calls numbers until it detects a connection, then
passes the call to a live agent.

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ANALYTICAL CRM EXTENDING CRM

Website personalization – Occurs when a website has stored Current trends include
enough data about a person’s likes and dislikes to fashion
• Supplier relationship management (SRM)
offers more likely to appeal to that person
• Analytical CRM relies heavily on data warehousing • Partner relationship management (PRM)
technologies and business intelligence to glean insights into • Employee relationship management (ERM)
customer behavior
• These systems quickly aggregate, analyze, and disseminate
customer information throughout an organization

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King's University College MOS 1033A/B

ENTERPRISE RESOURCE PLANNING 1 ENTERPRISE RESOURCE PLANNING 2

Enterprise resource planning – Integrates all departments Reasons ERP systems are powerful tools
and functions throughout an organization into a single IT
• ERP is a logical solution to incompatible applications
system (or integrated set of IT systems) so that employees
can make enterprise-wide decisions by viewing enterprise- • ERP addresses global information sharing and reporting
wide information on all business operations
• ERP avoids the pain and expense of fixing legacy systems

Watch the videos:

3 What is an ERP
4 What is Enterprise Resource Planning

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ENTERPRISE RESOURCE PLANNING 3 ENTERPRISE RESOURCE PLANNING 4

ERP systems collect data from across an organization and ERP Systems Automate Business Processes
correlates the data generating an enterprisewide view

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King's University College MOS 1033A/B

ENTERPRISE RESOURCE PLANNING 5 ENTERPRISE RESOURCE PLANNING 6

The Organization Before ERP ERP Bringing The Organization Together

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BENEFITS OF ERP 1 THE BENEFITS OF ERP

Core ERP component – Traditional components included in

most ERP systems and they primarily focus on internal
operations
Extended ERP component – Extra components that meet
the organizational needs not covered by the core
components and primarily focus on external operations

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King's University College MOS 1033A/B

BENEFITS OF ERP 2 CORE ERP COMPONENTS

Three most common core ERP components

1. Accounting and finance
2. Production and materials management
3. Human resource

Three of the Largest ERP providers are:

1. SAP (Business One)
2. Oracle (Netsuite)
3. Microsoft (Dynamics 365)
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PRODUCTION AND MATERIALS MANAGEMENT ERP

ACCOUNTING AND FINANCE ERP COMPONENTS
COMPONENTS

Accounting and finance ERP component – Manages Production and

accounting data and financial processes within the enterprise materials management
with functions such as general ledger, accounts payable, ERP component –
accounts receivable, budgeting, and asset management Handles the various
aspects of production
planning and execution
such as demand
forecasting, production
scheduling, job cost
accounting, and quality
control

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King's University College MOS 1033A/B

HUMAN RESOURCE ERP COMPONENT EXTENDED ERP COMPONENTS

Human resource ERP Extended ERP components

component – Tracks include:
employee information
• Business intelligence
including payroll,
benefits, compensation, • Customer relationship
performance management
assessment, and
• Supply chain management
assumes compliance
with the legal • Ebusiness components include
requirements of multiple • Elogistics
jurisdictions and tax
authorities • Eprocurement

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MEASURING ERP SUCCESS ORGANIZATIONAL INTEGRATION WITH ERP 1

ERP systems contain multiple complex components that are SCM, CRM, and ERP are
not only expensive to purchase, but also expensive to the backbone of ebusiness
implement Integration of these
applications is the key to
Costs include success for many
• Software companies
• Consulting fees Integration allows the
unlocking of information to
• Process rework
make it available to any
• Customization user, anywhere, anytime
• Integration
• Testing/Training

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King's University College MOS 1033A/B

ORGANIZATIONAL INTEGRATION WITH ERP 2 ORGANIZATIONAL INTEGRATION WITH ERP

The three primary ERP implementation choices
Balanced scorecard – Enables organizations to clarify their
driving the next generation of business operations.
vision and strategy and translate them into action
Balanced scorecard views the firm from four perspectives

• Learning and growth

• Internal business
process
• Customer
• Financial

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ON-PREMISE ERP CLOUD ERP 1

Cloud computing offers new ways to store, access, process,
On-premise systems - and analyze information and connect people and resources
Include a server at a from any location in the world where an Internet connection
physical location using an is available
internal network for internal
access and firewalls for
remote users’ access
• Legacy system - An old
system that is fast
approaching or beyond
the end of its useful life
within an organization

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King's University College MOS 1033A/B

CLOUD ERP 2 HYRBID ERP

Cloud computing advantages for ERP implementation
Hybrid ERP - Splits the ERP functions between an on-
premises ERP system and one or more functions handled as
Software as a Service in the cloud
Scenarios common in hybrid architectures of ERP:
• A business with a very specific local focus: single-site or
multisite within a single country or region
• A business with operations geared strongly toward a
specific industry
• A newly acquired operation with a mismatch of multiple
outdated, unsupported ERPs
• A small company with no formal ERP in place

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LEARNING OUTCOME REVIEW

Now that you have finished the chapter please review the
learning outcomes in your text

Because learning changes everything. ®

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